Thursday, April 6, 2017

The Managed Care Alliance

The Pitch:

The Managed Care Alliance system inserts a set of independent care managers between the care providers and payers. Operating under a set of care optimizing protocols to assure appropriate care, the care managers eliminate under treatment and over treatment that characterizes the current health care. In this elegantly simple system, patients, care providers, and payers are allowed to benefit.
Care providers joining the system must only agree to follow a basic set of protocols. By so doing, they create a non-adversarial framework in which they can practice medicine. While differences occasionally occur between providers and managers, in most instances care follows protocols.
Payers in this system must only pay medical bills, they have no responsibility for care. This allows payers to pay medical bills without the worry that care is inappropriate.
Notably, in this system, each party benefits by being allowed to retain what they need. The patients, however, are the real winners by receiving the treatment they need in a timely manner without consideration of cost. They have full access to care within the network.
Already tested in the crucible of workers' compensation, The Managed Care Alliance system has proven its benefits in creating partnerships and lowering health care costs.

Positioning:

The major barrier to universal coverage and cost containment is the adversarial relationship between care providers and payers. The missing principle is "cooperation" in which the care providers, care managers, and payers work in concert to assure appropriate patient care. With appropriate care, the health care system operates at a rational cost and benefits inure to the patient.

Innovation:

Define the innovation
The Managed Care Alliance system inserts a set of independent care managers between the care providers and payers. Operating under a set of care optimizing protocols to assure appropriate care, the care managers eliminate under treatment and over treatment that characterizes the current health care. In this elegantly simple system, patients, care providers, and payers are allowed to benefit.
Care providers joining the system must only agree to follow a basic set of protocols. By so doing, they create a non-adversarial framework in which they can practice medicine. While differences occasionally occur between providers and managers, in most instances care follows protocols.
Payers in this system must only pay medical bills, they have no responsibility for care. This allows payers to pay medical bills without the worry that care is inappropriate.
Notably, in this system, each party benefits by being allowed to retain what they need. The patients, however, are the real winners by receiving the treatment they need in a timely manner without consideration of cost. They have full access to care within the network.
Already tested in the crucible of workers' compensation, The Managed Care Alliance system has proven its benefits in creating partnerships and lowering health care costs.

Context for Disruption:

The main focus of The Managed Care Alliance model is to provide a health care system in which current players, care providers and payers (insurers or employers), will work cooperatively to assure patients receive appropriate care.
Created in 1990, The Managed Care Alliance (sold in 1998) operated as an independent care manager for large employers wishing to control medical and indemnity costs associated with workers' compensation insurance. There is no more adversarial insurance system in the US than workers' compensation.
Because insurers have no incentive to cooperate with independent care managers and may initially see them in conflict with their own claims program, The Managed Care Alliance grew by decisions made by employers to implement the program. Working almost exclusively with large employers, 50,000 or more employees, The Managed Care Alliance extended its reach to several hundred thousand lives. In turn, it also built a national care provider network with about 10,000 providers.
Whether measured by patient satisfaction, care provider satisfaction, employer satisfaction, or cost savings, The Managed Care Alliance clearly demonstrated that it could fundamentally change the health care - insurance model for the good of all.

Delivery Model:

Building a universal health care system based on The Managed Care Alliance model will undoubtedly require governmental action. While the original model operated for the benefit of large employers and their employees, a universal system of care involving all care providers and private or public payers will require leadership at a state or national level.
It would be wise to build confidence in the model through a pilot program. Because the system needs a medical/provider network, the pilot program should be geographically centered. With appropriate government inducements, certain health care insurers would undoubtedly join the program and their provider networks would enroll.
With legislative action, we would form a private/public corporation to provide the independent care management function. This function will require start up funding.
Because this model does not fundamentally change the participants in the US health care system, there are no intrinsic barriers and it should have a relatively smooth acceptance.

Key Partnerships:

During the 1990's, and without governmental support, The Managed Care Alliance managed to grow by forming partnerships with care providers, large employers (payers), and patients. Without these partners, the system would never have worked. The partnerships worked because all parties benefited.
Patients benefit by free choice of doctors, assurances of appropriate care for their condition, and fully paid medical care.
For medical providers, the benefits are fair pay for services (often at fee levels above those paid by insurers), no requirement for pre-certification, less paperwork, and confidence that their bills would be paid. The Care Management system protects the providers against malpractice lawsuits by joining the defense against nuisance claims.
The payers, whether private insurers or government, benefit from lower costs, both in medical/indemnity losses and operating costs.
The Managed Care Alliance non-adversarial health care system builds a win-win situation.

Financial Model:

The Managed Care Alliance financial model was critical to its success and survival. When medical providers joined the network, they agreed to submit all medical bills directly to the care managers for review and processing. Through a combination of software and manual review, medical bills were processed for payment. Bills were then submitted to the payer for payment which was sent directly to the care managers. The providers were then paid by the care managers.
This payment method had several critical benefits. On the one hand, care providers had to come to the care managers for payment of their bills and this created a subtle dependency. Keep in mind, however, that the care managers always treated the providers fairly and paid them in a timely manner, especially when compared with insurers.
On the other hand, this system generated a large cash flow which helped cover operating expenses on a daily basis. The Managed Care Alliance operated at a profit.
In addition to the cash flow generated by this payment system, The Managed Care Alliance also charged a fee for services to the payers. In every case, it was expected that the care management fees would be generated out of medical cost savings. Since the savings typically fell between 35% and 50% of pre-managed care costs, the managed care fees required no additional investment on the part of payers.

What is your annual operating budget?

To be determined.

Effectiveness

In the 1990's, The Managed Care Alliance generated measurable medical cost savings ranging from 35% to 50%. In every case, the savings were measured by the payers (insurers and employers) and not The Managed Care Alliance.
In a larger way, however, the real benefits of a non-adversarial system are found in the relationships between care providers, care managers, patients, and payers (employers). Think for a moment of a health care system in which care providers can practice without the daily interference from the payers. Think about the collegiality of providers and care managers working together to assure appropriate care. Think about patients who have care managers working daily on their behalf. Think about payers who see their losses falling and law suits disappearing. Take a large part of the legal costs out of the health care system.
All these benefits and more were demonstrated by The Managed Care Alliance. And while due to the complexities of modern medicine, we cannot return to the days in which doctors and patients made all decisions together, we can bring the patient back into the equation with care managers working on his/her behalf.

Which element of the program proved itself most effective?

1. Cost Savings - By assuring appropriate care, the payers (employers and insurers) experienced dramatic reductions in health care costs.
2. Care Provider Satisfaction - By paying providers fairly for services, we were able to build positive relationship with providers which led to appropriate care and much lower utilization rates.
3. Patient Satisfaction - By helping providers give appropriate care, we were able to help patients recover more quickly and return to normal lives. Patients did not file a single complaint or law suit against The Managed Care Alliance, care providers, or payers during program's run.

Number of clients in the last year?

The Managed Care Alliance worked with about 10 major employers with over 200,000 employees.

What is the potential demand?

What is the demand for non-adversarial, patient oriented, appropriate health care? The demand, of course, is universal. All Americans deserve to be covered by this program.
What is the demand for a national health care program with a saving over current expenditures above 35%? Universal.
What is the demand for a national health care program that returns control of patient care to the physicians and patients? Universal.
The Managed Care Alliance is not nationalized health care in any sense. Care providers remain independent, having more freedom than they do presently. Patients can choose their care providers from within the system. Finally, patients and employers can choose their insurers. Some might object that the insurance industry is a large and powerful Washington lobby and it will never agree to this plan. The Managed Care Alliance is not a national insurance program. It does not replace public and private insurers. Insurers will continue to charge premiums based on market rates. In fact, insurers will experience lower operating costs by the elimination of claims services and law suits related to their efforts to control costs. The care managers and providers are responsible for care.

What are the alternatives.

1. Keep the current system? There are too many under insured and uninsured. The costs are rising out of control. The adversarial health care system drives practitioners out of health care and prevents others from joining. There are no rational arguments for continuing with the current system.
2. Nationalized, Single Payer Health Care? Americans don't want nationalized health care. They enjoy the freedom to choose their doctors, even if it is only the HMO primary.
As stated, the demand for The Managed Care Alliance is universal.

Scaling up Strategy

Based upon experience in the 1990's, a non-adversarial, care management program will require government intervention and support. While The Managed Care Alliance succeeded in the 1990's among large employers, it's growth was limited by the inertia of an existing system. We had to "sell" employers on the concept and then rely on their ability to stand up the the countervailing pressure from the insurers.
It would seem obvious that the best strategy for implementing The Managed Care Alliance system of health care would be through a pilot program with an existing non profit health care insurer. This should be the goal over the next three years. In order to implement this program, government funding of several million dollars would need be made available for software, contracting with care providers, and staffing the care management team. By utilizing the insurer's existing care provider network, the cost of building such a network would be minimal.
Testing the program success would fall to the insurer and government auditors. Since insurers track costs, these measurements are easily made.

Expansion plan:

With successful implementation and testing, staged growth would follow by expanding to other nonprofit health care insurers and eventually private insurers. With government behind the program, cost savings evident, and providers and patients supportive, expansion to a national health care system would follow naturally.
Cooperation among partners is one of the critical elements in expanding The Managed Care Alliance. It derives from partnering with existing players in the health care arena. By not competing with them and only seeking to improve the existing system by restoring rational health care (non-adversarial, appropriate care), The Managed Care Alliance system has no natural enemies.

Origin of the Initiative

I conceived the idea for The Managed Care Alliance in early 1990 while trying to coordinate care for injured employees in an extremely adversarial system. Why not have a medical network of cooperative providers who would follow a basic set of common sense rules for patient care and not over-utilize? Why not seek "appropriate" care instead of lowest cost? Why not pay the providers fairly for services? After successfully marketing the concept to large employers who were strong enough to control their insurers, The Managed Care Alliance was born.

Sustainability:

A pilot program would require several million dollars for software and care management staffing. This assumes that an existing health care insurer of sufficient size would come aboard giving us an existing medical network. Without government inducements, I do not expect that any insurer would voluntarily give up its claims and loss management function to an independent care management third party.
The key to this program is state or federal government support. If government is behind the program then financing the program should not be a major issue.








Saturday, February 11, 2017

Can Republicans Figure It Out?

Short answer is "no."

I can detect no signs that the Republican party has any better ideas for saving healthcare than the democrats. The problem is related to the lack of Phenomenologists in the political system. A phenomenologist would ask the question, "What is the essence of healthcare?" Of course, Aristotle would be asking the same question if he were alive today. To know a thing, one must know it's essence.

I submit that the essence of healthcare is appropriate treatment for illness or injury. Pretty simple and intuitive but the implication is profound for designing a well functioning and rational healthcare system.

There may be many paths that one could take to achieve appropriate care. I have suggested one model in this blog but acknowledge that there may be others. The key, it seems to me, is in the relationship between primary care and patients. If the primary care physicians have time and knowledge to properly diagnose and deliberately limit care to the clinical findings, we can approach a rational healthcare system. One of the keys is to pay primary care doctors promptly and fairly to reward a healthy patient/physician relationship. This is an area where short sighted insurance programs fail miserably.

Regardless of how we achieve appropriate care, the failure to do so will eventually bring down our healthcare system and and lead to rationing - either denial of service or failure to pay. As Pogo said, "We have met the enemy, and it is us."